Time to sell............................?

Here's a chart and comments from Lance Roberts at Streettalklive.com that mimic my position from yesterday. First the chart showing the SP500 with Bollinger Bands at the 2 and 3 standard deviation levels. His point is that when the market starts to touch the extremes, which are near the 3 standard level, its time to get conservative. Below are selected comments from the article  (bold and italics are mine)

"However, with the market now pushing higher, and "Dow 13,000"being flashed across CNBC with a point by point count of the potential crossing, investors are once again giving into their"greed" emotion. The reality is that the market is already pushing extremes and the opportunity to buy into the market has already passed. This emotion based, lemming, response to very advanced rallies is the same "siren's song' that has lured many a ship's Captain to their watery graves. Listening to the media will lead you to ruin."

"While the media continues to tout every advance to a previous level as the coming of the next great bull market - keep in mind that this has nothing to do with your money or investing. Bonds and cash have outperformed the stock market over the last decade - yet individuals, chided along by the media and Wall Street, still chase the worst performing asset class over that time frame."

Here's another chart of mine that shows extremes in two well known indicators. The middle window on the chart is a measure of the number of puts/calls. If you're bullish you'd be buying call options and if you're bearish you'd be buying puts. Currently we are working off extreme optimism. (Note sell signal upper right hand side of chart)

The lower window on the chart shows the volatility index (VIX) which measures fear or greed. It works inverse to the SP500 index and it too is at an extreme for complacency (lack of fear) and will start to turn up in the near future.



All things considered .................... I'd have to say we are getting close to some sort of top.